AP tells SC it can not allow OMC to sell iron ore deposit

The Andhra Pradesh government today told the Supreme Court that it can not allow Obulapuram Mining Company (OMC) to sell and dispose of iron ore deposits to pay its due taxes and duties as the CBI is conducting an enquiry on illegal mining in the state.

Attorney General Goolam E Vahanvati appearing for the state government told a special forest bench headed by the Chief Justice S H Kapadia that the excavated iron ore might be required by the investigation agency.

He also rejected the apprehensions raised by OMC, owned by powerful Reddy brothers of Karnataka, that the ores would get soiled and lose value after getting wet in approaching monsoon season.

"Material would not be damaged except causing some oxidation ... CBI requires material to be kept there to take a stock," Vahanvati said today.

Vanhanvati's response came after the bench during its last hearing asked the state whether OMC should be allowed to sell 2.5 lakh metric tonnes of iron ore lying at its mines and deposit the cash earned from it into a separate bank account until the matter was pending in court.

The apex court's directions came after OMC in its application before the court sought permission to dispose of 2.5 lakh metric tonnes of iron ore to pay the tax departments demand of Rs 184 crores.

The bench, which also comprised Justice Afatab Alam and Justice KS Radhakrishnan, today adjourned the matter, saying that it would pursue this case in July after hearing on illegal mining by Lafarge in East Khasi Hill in Meghalaya was completed.

Moreover, the bench also directed the OMC to give a list of mined iron ores before May 2010 and after 2010.

The company owners Reddy brothers, who hold mining leases for over 140 hectares of land spread in Andhra Pradesh's Anantapur district, are accused of encroaching upon reserve forest land.

Earlier, the apex court had in March 2010 directed OMC to stop mining activities over allegations of mining in the Bellary Forest region.

However, later on May 10 that year, it allowed OMC to resume mining in the undisputed region, while directing it not to mine on a distance upto 50 meters on either side of the inter-state boundary of Andhra Pradesh and Karnataka.

However, on January 7, 2011, Central Empowered Committee (CEC), a high-powered panel appointed by the apex court, recommended cancellation of OMC's mining lease after finding large-scale illegal mining and violations of various environmental laws in the latter's mining operations.